LONDON (Reuters) – “Hi guys, could you please show me a firm bid for 100 bitcoin?” a seller texts on Skype.
“One sec. $10270.”
Two minutes later: “Sorry guys, that was an old order from Friday when skype wasn’t working.”
“I really think we should get off skype. Bad things could happen. Someone is going to make an expensive mistake.”
A messaging exchange over a potential $1 million deal, between a European asset manager looking to sell bitcoin and broker Joel Fruhman, illustrates the casual and often chaotic nature of cryptocurrency dealmaking.
Trades involving hundreds of thousands, or millions, of dollars are routinely struck via brief chats on apps like Skype, WhatsApp, WeChat or Zoom, often with scant certainty over the identities of participants or the legal basis of agreements.
“We’d end up in a Zoom call with about five ‘introducers’ – we didn’t really know who any of them were,” said Fruhman, a physicist by training who started a cryptocurrency brokerage business with his brother Dan in their British hometown of Manchester in 2018.
“And who were we? What was our credibility?”
Over-the-counter (OTC) trading – buying and selling through a broker – is now beginning to change, however.
It is moving toward electronic automation as the cryptocurrency sector matures from the province of online enthusiasts to emerging financial assets drawing increasing mainstream interest, Reuters interviews with more than a dozen industry players show.